old Prices Rise Amid Expectations of U.S. Interest Rate Cuts
Gold prices are moving toward their highest levels in six weeks, trading today near $4,200 per ounce, supported by investor expectations that the U.S. Federal Reserve will shift toward a more accommodative monetary policy in the coming period.
Expectations of Interest Rate Cuts
Analysts indicate that recent U.S. economic data has shown a slight slowdown in economic activity, boosting financial market expectations that the Federal Reserve may cut interest rates during its meeting scheduled for next week.
Markets currently estimate the probability of a rate cut at 87%, according to market indicators.
Additional Factors Supporting the Rise in Gold
Several factors have contributed to strengthening positive sentiment toward gold as a safe store of value, including:
- Pessimistic expectations triggered by the nomination of Kevin Hassett, former White House economic advisor, to succeed Jerome Powell as Chair of the Federal Reserve.
- The decline in U.S. Treasury yields following a global selloff in government bonds.
Upcoming Economic Indicators
Investors are now focused on several key economic indicators that could influence the trajectory of interest rates and global liquidity levels, most notably:
- The ADP employment report for November, which will be released today.
- The Personal Consumption Expenditures (PCE) data for September, the Federal Reserve’s preferred inflation gauge, scheduled to be released next Friday.
Gold Remains Stable Despite Profit-Taking
Despite the corrective decline in gold prices yesterday due to profit-taking by traders, the precious metal has maintained trading levels near its highest in six weeks.
This reflects the strong underlying support it continues to receive amid the current economic environment.
Gold remains one of the most important financial assets that investors turn to during times of economic uncertainty and expectations of shifts in major central banks’ monetary policies.
